Cen­tral bank pre­dicts Brazil will miss the fis­cal tar­gets set for 2014

The China Post - - WORLD BUSINESS -

After en­dur­ing a fourth year of low growth, Brazil will miss its fis­cal tar­get for 2014 by a wide mar­gin, its cen­tral bank said Mon­day.

Last month, the world’s sev­enth largest econ­omy’s pub­lic sec­tor pri­mary fis­cal bal­ance — a deficit of 8.1 bil­lion reais (US$3.1 bil­lion) — was worse than fore­cast and the worst Novem­ber on record.

Brazil’s ac­cu­mu­lated Jan­uary to Novem­ber deficit hit 19.642 bil­lion reais (US$7.55 bil­lion), with growth fore­cast barely to creep above zero this year.

Brazil had tar­geted a pri­mary fis­cal sur­plus for the year of 1.9 per­cent of GDP or some 91.0 bil­lion reais (US$35 bil­lion) to re­as­sure mar­kets of its abil­ity to ser­vice its debts.

In­com­ing Fi­nance Min­is­ter Joaquim Levy told the Valor fi­nan­cial daily in an in­ter­view pub­lished Mon­day that the tar­get had been low­ered to “per­haps 10 bil­lion reais (US$3.8 bil­lion) or 0.2 per­cent of GDP.

Hit­ting the re­vised tar­get would re­quire a De­cem­ber sur­plus of 29 bil­lion reais — sig­nif­i­cantly more than any other monthly fig­ure this year.

Levy said the 2015 tar­get would be set at US$66 bil­lion or 1.2 per­cent of GDP while stress­ing the gov­ern­ment would have to hack away a raft of sub­si­dies if Brazil is to re­turn to growth, which hit 7.5 per­cent in 2010 but slumped to just 1.0 per­cent in 2012 and 2.5 per­cent last year.

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